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rv-pro.com January 2019 • RV PRO • 165
base of consumer confidence, always an
important driver for the economy.
"Consumers seem to be euphoric right
now," Hoyt says. "The fiscal stimulus in
the form of tax cuts, as well as the tight job
market, mean there are very few negatives
when it comes to consumer fundamen-
tals. The fact that consumer confidence is
near historic highs makes sense given the
current conditions of low unemployment
and the gradual increase in wages – even
though wage growth is still not high."
Wages Rise
There's no doubt that consumer confi-
dence is rising in response to a happier jobs
picture, one that should only brighten in
the months ahead. Moody's expects unem-
ployment to drop to 3.4 percent by the
end of 2019, down from the 3.7 percent
recorded at the end of 2018. (Moody's
Analytics first declared that the economy
had reached the state of what is often called
"full employment" with its 4.1 percent
showing in 2017).
"The fundamentals of the labor market
look good, at least into the mid-year of
2019 and probably longer," Hoyt says.
"The nation is adding jobs faster than the
growth in the wage-earning generation, so
we expect a further tightening of the labor
market in 2019."
And it seems that healthy job growth
is finally affecting wages. Average hourly
earnings are expected to grow by 3.2 per-
cent in 2019, up from the 2.8 percent
of 2018 and the 2.6 percent of 2017,
according to Moody's.
"The recent rise in wages is very good
for the economy," says John Manzella, a
consultant on economics and global busi-
ness, Buffalo, N.Y. "The more disposable
money consumers have, the more they
spend, and consumer spending represents
70 percent of the nation's economy."
Hoyt says the increase in take home pay
seems to be a more important consideration
for people than any negative economic news.
"Consumers do not seem to be worried
about the effects of a possible trade war,
or gridlock in Washington, or the rise in
gasoline prices that has taken place over
the past year," he says.
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